CMS Defends Flat Rates But Contraction Coming; UnitedHealth Crashes
The Trump administration’s top Medicare official is defending the meager proposed Medicare Advantage (MA) increase for 2027, saying the administration is a big supporter of MA. Large plans stocks dropped dramatically today after the after-hours’ announcement yesterday.
Analysts, trade groups, and plans are saying that yet another major contraction could occur in 2027. Benefits, products, and geographies began contracting in 2024, with major changes in 2025 and 2026.
While the economic growth rate was generous, the administration proposed two risk adjustment changes that will take nearly all of the 5% trend away. Some expect a contraction of enrollment from the 2026 enrollment season when statistics come out soon. I have doubted this, but it very well could happen.
Trump officials justify the risk adjustment changes and flat hike as an effort to combat overpayments in the program.
In other news, UnitedHealth Group’s stock crashed today dropping about 20% in light of poor financials and the impact of the MA announcement. Humana saw it stock drop by about that percentage as well, with other majors falling as well.
At its Q4 2024 financial call, UnitedHealth Group said it expects to lose between 1.3 million and 1.4 million MA members in 2026 across group, individual and dual special needs plans. UnitedHealth also expects to see some membership losses in Medicaid – a decline of between 565,000 and 715,000 people, including D-SNP enrollees. Commercial coverage could drop 550K to 850K. For full-year 2025, profits were $12.1 billion, down from $14.4 billion in 2024. Full-year 2025 revenues were $447.6 billion, up from the $400.3 billion reported in 2024. The medical loss ratio was 92.4% in Q4 2025 and 89.1 for the full year.
In shocking news, UnitedHealth is forecasting a decline in 2026 revenue, the first annual contraction in more than three decades. In a stunning reversal as well, Optum Health lost $278 million from operations in 2025, a major decline from the $7.8 billion in gains reported in 2024. Revenue fell less than 1% to $25.5 billion.
How the mighty has fallen.
Additional articles: https://www.fiercehealthcare.com/payers/unitedhealth-shares-fall-premarket-company-misses-revenue-releases-2026-outlook and https://www.modernhealthcare.com/insurance/mh-unitedhealth-group-earnings-optum-health/ and https://www.modernhealthcare.com/insurance/mh-unitedhealth-earnings-q4-2025/ and https://www.healthcaredive.com/news/medicare-director-defends-ma-2027-advance-notice/810635/ and https://www.healthcaredive.com/news/cms-proposed-2027-advance-notice-chart-reviews-medicare-advantage/810549/ and https://www.healthcaredive.com/news/unitedhealth-unh-q4-2025-medicare-advantage-troubles/810570/ and https://www.beckerspayer.com/financial/unitedhealthcare-projects-up-to-2-8-million-membership-decline-in-2026/ and https://www.beckerspayer.com/financial/unitedhealths-2025-profit-dips-to-12-1b/
(Some articles may require a subscription.)
#medicareadvantage #healthplans #cms #rates #unitedhealthcare
https://www.fiercehealthcare.com/regulatory/cms-proposes-flat-ma-rates-risk-adjustment-updates-2027
Year 3 Drugs Announced For Medicare Drug Price Negotiations
After a successful year two negotiations of Medicare drug prices, doubling the savings from year one, the Trump administration announced the 15 drugs to be negotiated in 2026 for year three. The prices would go into effect in 2028. At the same time, the Trump administration is implementing a most-favored-nation pricing model in both Medicare and Medicaid.
Year three drugs subject to negotiation include an inhaler, an HIV drug, Botox, an inflammatory bowel disease drug, a prostate cancer medicine, breast cancer drugs, an atypical antipsychotic, diabetes medicine, a drug for food allergies, and several immunologics.
Additional articles: https://www.fiercepharma.com/pharma/trump-administration-rolls-out-15-more-high-profile-drugs-ira-price-negotiations and https://www.hhs.gov/press-room/oig-clears-path-for-lower-cost-prescription-drugs.html
#mfn #irp #ira #medicare #drugricing #partd
https://thehill.com/policy/healthcare/5709615-trump-administration-medicare-drug-negotiations/
— Marc S. Ryan
